If you insert a movie DVD into your Mac, the DVD Player application will play it. It seems like this is not as sharp as an upscaling DVD player attached to the same TV display.
To copy a DVD movie to disk, move the mouse to the top of the screen and use the menu to quit DVD Player. Then start Disk Utility, select the movie, and click "create new image," selecting "DVD master" and no encryption. This will create a (big) file on disk that is a copy of the movie. You can play it later by double clicking. If you want to burn it to another DVD disc, you would have to break the copyright code (Google for "handbrake").
If you have a Netflix streaming account, you can play movies by clicking "Play" and "full screen."
I tried out iDVD in 2010. I had a folder of pictures in iPhoto from our vacation. So I started iDVD and created a new "project." I selected a "theme" for it: this picks the look for the menu page. I edited the title to say "Italy 2009." The theme had some "drop zones" and I dropped pictures into them. I chose "add slideshow" from the menubar to add an item to the DVD menu, edited that to say "Venice," and double clicked. Then I added a bunch of Venice pictures. Set the display time and transition and clicked "return." Repeated this for Trani, Lecce, and Venice again. Then I chose "burn DVD" and fed it a blank DVD when it wanted one. iDVD informed me it would take 4 HOURS. Sure enough, 4 hours later it had created a DVD that plays on a DVD player.
I could have put music onto the DVD but didn't know what to pick, so I left that out. I chose the transition of "dissolve between slides" and I think that made the encoding take a lot longer. Next time I try it I will set "no transition" and see if it burns more quickly. There were a lot of other options in iDVD but I didn't try them out yet.